9/14/2007 @ 6:00PM

Newspaper Stocks Hit 10-Year Lows

How’s USA Today celebrating it’s 25th anniversary this weekend? With shares of parent company
Gannett
at their lowest closing level in 10 years.

They aren’t partying alone. Joining the festivities are shares of the
New York Times Co.
and
McClatchy
, both of which finished the week at their lowest levels since the Clinton administration.

Nothing particularly new is moving the stocks–it’s just the same old, same old. Monthly advertising numbers for July and August showed further declines, giving investors another excuse to lose shares they weren’t terribly excited to hold in the first place.

“Investors are just dumping these stocks because they’re out of favor,” said Edward Atorino, a media analyst at Benchmark in New York.

Shares of Gannett fell 26 cents Friday to close at $44.74, their lowest finish since May 2, 1997, when they closed at a split-adjusted $43.88. The Times’ shares dropped 44 cents to finish at $19.80, their lowest close since Feb. 5, 1997, when they ended at a split-adjusted $19.50. McClatchy’s shares slipped 4 cents to close at $21.80, their lowest finish since Sept. 27, 1996, when they closed at a split-adjusted $21.50.

Elsewhere, shares of
Journal Register
rose 16 cents to close Friday at $3.25, after bottoming out at an all-time closing low of $2.54 on Aug. 14. The company’s shares began trading publicly on May 1, 1997 at $14.

Not all newspaper stocks have tanked during the past 10 years. Shares of the Washington Post Co. closed Friday at $771.51, down 55 cents, while shares of E.W. Scripps finished at $42.37, up 55 cents. Both companies’ shares have more than doubled in value during the past decade. Then again, both make most of their money from non-publishing businesses–the Post from its Kaplan education subsidiary, Scripps from its cable network business.

The latest batch of advertising data came from the Times Co., which on Wednesday released August numbers that weren’t uniformly awful. The company’s New England Media Group, which includes The Boston Globe and the Worchester Telegram & Gazette, saw ad revenue sink 9% from a year earlier.

But the New York Times Media Group, which includes the company’s flagship paper and the International Herald Tribune, eked out a 0.2% gain, thanks to gains in some national advertising categories and online ads, which made up for continued weakness in classified advertising.

The most recent newspaper advertising data from Gannett
, McClatchy and Journal Register reflected poor performances in July. Total ad revenue fell 6.1% at Gannett, 9.4% at McClatchy and 7.7% at Journal Register (through the five weeks ended Aug. 5).

Benchmark’s Atorino sees some signs of improvement, or at least slowing declines, in retail, entertainment and travel advertising. But classified ads, particularly real estate and automotive ads, “are just falling off a cliff and haven’t hit bottom yet,” he said.

The sell-off in newspaper stocks is “getting a little overdone, but frankly, at this time it’s hard to get optimistic,” Atorino said.